The bipartisan 21st Century ROAD to Housing Act marks one of the most significant federal housing reforms in decades. But while the legislation was written at the federal level, much of its success will depend on what happens next in state capitals and city halls.
States and local governments will be responsible for carrying out many of the provisions in the bill that the National Association of REALTORS® supported, such as updating housing programs and meeting new compliance requirements to pursuing future federal funding opportunities designed to encourage housing production.
For state and local officials, the coming year will largely be about preparation. Many provisions require Department of Housing and Urban Development (HUD) rulemaking before they can be fully implemented, and several new grant programs remain contingent on future appropriations. Even so, communities that review their housing policies, strengthen partnerships and prepare projects now will likely be in the strongest position as implementation moves forward.
The legislation reflects a broader shift in federal housing policy, supporting communities that reduce barriers to development while giving state and local leaders greater flexibility to address housing shortages. Although all of the law’s competitive grant programs still require funding, communities that begin preparing now may be better positioned to benefit when funding becomes available.
One of the first priorities will be meeting new implementation deadlines. States must certify that their laws treat manufactured homes built without a permanent chassis the as those build with one, while jurisdictions receiving Community Development Block Grant (CDBG) funding will need to maintain publicly accessible inventories of undeveloped public land they own.
“Successful implementation of the law will require collaboration across every level of government, but this law creates a stronger framework for expanding housing opportunities, improving affordability and helping more Americans achieve homeownership.”
-Shannon McGahn
The law also modernizes several long-standing HUD programs that many states and local governments already administer. For the first time, communities can use CDBG funds, up to 20% of their annual allocation, for new affordable housing construction. Because CDBG is an established program funded at roughly $3 billion per year, these are resources communities can put to work relatively quickly if they plan ahead.
The law also expands flexibility under the HOME Investment Partnerships Program, giving participating jurisdictions more options to support homeownership and shared-equity housing, though many of those changes await HUD rulemaking. Together, these updates give communities additional tools to address local housing needs while reducing administrative hurdles.
How Local Reforms Matter
Another major theme of the legislation is encouraging communities to increase housing supply through local reform rather than one-size-fits-all federal mandates. If Congress provides funding, the law authorizes competitive grants for communities pursuing zoning modernization, commercial-to-residential conversions, manufactured housing preservation, housing planning, infrastructure improvements and whole-home repair programs.
Rather than prescribing local land-use decisions, the legislation seeks to reward jurisdictions that proactively expand housing opportunities.
HUD will also convene a task force, including state and local officials, planning and zoning boards, and home builders, to develop voluntary model frameworks covering issues such as parking requirements, accessory dwelling units, lot sizes and permitting practices. The frameworks are meant to give communities a menu of best practices for increasing housing production, which they can adopt as they see fit. Adoption is entirely optional, keeping decisions in the hands of state and local governments.
“The 21st Century ROAD to Housing Act gives states and local communities more tools to tackle housing challenges in ways that reflect their local needs,” says Shannon McGahn, executive vice president and chief advocacy officer of the National Association of REALTORS®.
“A recent poll from American Property Owners Alliance showed 89% of registered voters supported the 21st Century Road to Housing Act,” she says. “Successful implementation of the law will require collaboration across every level of government, but this law creates a stronger framework for expanding housing opportunities, improving affordability and helping more Americans achieve homeownership.”
For NAR members, those local decisions will help determine how quickly the law translates into new housing opportunities. As implementation unfolds, the communities that embrace reform, modernize their housing programs and position themselves for future investment are likely to be among the first to realize the law’s goal of expanding housing supply and improving affordability.
